Author: Faith Ngwenya, Technical Executive at the South African Institute of Professional Accountants (SAIPA)
Grant Thornton recently published their International Business Report for the third quarter of 2017. Their findings show that South African business executives continue to adopt a “wait and see” approach to business due to political and economic instability in the country.
Of the 100 South African business executives who are surveyed for the quarterly report, 72% confirmed that turbulence in the economy over the past six months have affected operations and decisions, 38% were considering investing offshore and 28% were contemplating selling their businesses.
The problem with keeping operations stagnant and simply focusing on keeping heads above water is that we’re not solving the problem – we’re perpetuating the problem and adding a steady stream of fuel to a slow burning fire. If everyone adopts a ‘wait and see’ approach, we’re not moving businesses or the economic prosperity of our country forward.
But the spotlight on growth and success
As professional accountants, we have a key role to play in changing the perspective of business owners and this can be achieved in a number of ways. At SAIPA, we’re encouraging clients to dig deep into the financial histories of their clients so that a spotlight can be put on what they have been able to achieve amidst tough turbulent times, economic downturns, and setbacks that have affected their industry or business specifically.
Many times, despite barriers, hurdles and challenges, businesses have been able to show positive growth. These are the things that your clients need to be reminded of and as an accountant, you should be drawing their attention to their successes and achievements.
Besides being the opposite of a doomsayer and essentially becoming nothing short of a cheerleader for your client’s business mission and goals, you can also highlight viable investment opportunities within our own borders. Money can be made by investing overseas, but there’s also money to be made by investing in South African investment opportunities.
Research investment opportunities that would appeal to your clients and that would align with their business operations, interests and industries to show them how they can benefit themselves as well as inject money into South African opportunities. Economic upliftment and sustainable development starts at home and if your clients are taking their wealth, jobs and businesses overseas, then it has a butterfly effect that negatively impact many South African citizens, their families, and the economy.
South Africa is still a major driver in the global economy
It’s also important to look at different economic indexes that can give your clients a better, broader perspective. Instead of waiting for the results of upcoming political events, which is essentially a short-sighted approach, delve into the indexes that are painting a much brighter picture. When compared to other BRICS, South Africa has become a major driver in the global economy and a force for change in the developing world. Context is key.
As accountants, we also need to do our part in making foreign investment in South Africa more attractive. Many businesses want to start operations in South Africa for myriad reasons, ranging from our natural resources to our proximity to booming African markets. One of the things that is holding them back is cumbersome legislation.
Our employment regulations are seen as a huge barrier to entry in the country and this is something that Government needs to carefully rethink. In September 2017, the World Economic Forum announced that South Africa had slipped down 14 positions in the World Economic Forum Global Competitive Index and restrictive labour regulations were cited as one of the reasons for this.
South Africa’s unemployment rate is high and it is disturbing. Accountants need to join forces with the appropriate unions and challenge these legislations so that we can make it easier and more attractive for companies to invest in our country; the natural result will be more employment opportunities for our people.
In conclusion, your clients need to be made aware of what they’ve been able to achieve despite economic situations that are far outside their realm of control. Show them how they have continued to grow, what they could be doing better, which areas of their business they should be investing in to drive growth and how a big-picture mentality and positive outlook can help them continue to grow.
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